U.S. President Joe Biden signed an executive order Friday giving the Treasury Department the authority to target financial institutions that facilitate Russia's efforts to bolster its defense industry.
The new sanctions authority is meant to gum up the Kremlin's push to restock the Russian military's depleted arsenal after 22 months of fighting in Ukraine. Russia has already lost over 13,000 pieces of equipment, including tanks, drones and missile systems, according to a U.S. assessment.
The order also seeks to tighten existing restrictions on diamonds and seafood imported from Russia after a review by U.S. agencies.
“We expect financial institutions will undertake every effort to ensure that they are not witting or unwitting facilitators of circumvention and evasion,” Treasury Secretary Janet Yellen said in a statement announcing the order. "And we will not hesitate to use the new tools provided by this authority to take decisive, and surgical, action against financial institutions that facilitate the supply of Russia’s war machine.”
The latest effort to tighten pressure on Russia comes just weeks after Biden and G7 leaders met virtually to discuss support for Ukraine as rancor spreads in Washington over the cost of backing Kyiv in a war that has no end in sight.
The White House has been locked in talks with key lawmakers to approve more money for Ukraine. Biden has proposed $110 billion package of wartime aid for Ukraine, Israel and other national security priorities. GOP lawmakers have declined to approve the money until the White House agrees to major immigration and U.S.-Mexico border policy changes. The Defense Department says it has nearly run out of available funds for supporting Ukraine’s defense.
The G7 leaders said in a statement following the December 6 meeting that they would work to curtail Russia's use of the international financial system to further its war in Ukraine and target “Russian military procurement networks and those who help Russia acquire machine tools, equipment and key inputs.”
Russian defense spending rose by almost 75% in the first half of 2023, and Russia is on track for record military spending next year.
“This executive order comes at a critical juncture,” Deputy Treasury Secretary Wally Adeyemo wrote in a Financial Times op-ed published Friday. “By raising the stakes for banks supporting sensitive trade with Russia and continuing to sanction new front companies and procurement networks, our coalition is pouring sand into the gears of Russia’s military logistics.”
